Spotify Exec Ken Parks On "Windowing": Mind-Boggling, Very Bad, Hostile

The biggest threat right now to subscription-based music services isn't coming from consumers or record labels—with millions of customers paying for monthly plans to Spotify and Rhapsody, all four majors see the services as major new sources of revenue. Rather, the biggest threat to these fast-growing companies is coming from artists themselves, and a practice some are calling "windowing."

Instead of making their new music available on iTunes and Spotify at the same time, some big-name acts are staggering their releases in the hope of bolstering traditional album sales. Just as a Netflix subscriber has to wait 28 days before gaining access to new movies, some artists are waiting a certain period before releasing their new albums for streaming on Spotify. Coldplay, for example, "windowed" Mylo Xyloto for months; other mainstream holdouts include the Black Keys and Adele.

Recently we caught up with Rhapsody CEO Jon Irwin, who gave us his opinion on the practice of "windowing." This week, Spotify's chief content officer Ken Parks shares his thoughts.

FAST COMPANY: What's your take on windowing?

KEN PARKS: My initial take is that it's a very bad idea. From a user standpoint, it's a pretty hostile proposition. The notion that you would want to withhold records from people who are paying 120 pounds or euros or dollars a year is just really mind-boggling. It's pretty hostile to punish your best customers and fans. We think it's a wrongheaded approach. There's certainly no data whatsoever to suggest that this increases unit sales. Windowing is not coming from record labels, which have every incentive to maximize the economic return on their investment for each individual record that they release.

I think all this has to be kept in perspective. These are rare cases right now. I know a lot of ink gets spilled when a band like Coldplay withholds a record. But these are still rare instances. The overwhelming number of records that are released every week are available on our service. That includes records that shoot to No. 1. Some managers and artists who are keen to work with us actually start streaming before the street date.

You've referred to these withholding artists as "corner cases," but many of these artists are more notable acts such as the Black Keys that garner a lot of attention. These artists believe that streaming might negatively affect their sales. Is this simply a myth? And if so, why do these artists believe it to be true?

Certainly it's not supported at all by data and facts. There's no data to suggest that it does [negatively affect] sales. To the contrary, our indicators point out that if you want to increase sales, you ought to be increasing access to your music. People want to listen to music—they don't want a 30-second sample. It's kind of wrongheaded to think you're creating scarcity by withholding [music from Spotify]. When you withhold a record on Spotify, it is available on torrent sites, on Grooveshark, as well as on YouTube likely. You're not creating any kind of scarcity. The very same bands who are withholding from streaming services are often available for free to users on YouTube, which doesn't monetize nearly as well as Spotify. If you think that promoting your record via streaming is a good thing for sales on YouTube, there is no reason as all to withhold it on Spotify. So it's kind of a head-scratcher—there is a bit of schizophrenia, I think, in the camp that wants to withhold their stuff. It's ridiculous to think that an 18-year-old kid who is denied access to listening on Spotify is going to run to iTunes and buy it. That's not the way it works. They're going to go to the torrent sites.

But I want to be very clear. We are not at all demonizing people who have a different point of view. We think that most of the world has been living in a different paradigm for the entire history of recorded music. They're used to unit sales. It's very difficult for some not only to get their mind around a new format but a new business model. It would be silly to think that entrenched behavior and habits—that have developed over a century—are going to change overnight. Look at iTunes in 2003: There was an uproar at the notion of selling records on an unbundled basis. There were high-profile holdouts including Radiohead, who thought it marked the end of the world. Controversies like this are not new. It is not surprising that there will be some taking a pause. It's thankfully a very short list. Most artists are extremely excited to be associated with this platform.

Why would Paul McCartney remove his music from Spotify and Rhapsody? He's been in the music business for so long; I can't imagine this was a rash decision. What's your elevator pitch to get him back on Spotify?

I can't speak to what might be in Paul McCartney's mind. I love Paul McCartney, and wish his music would be available to young kids who predominate our platform, and—let's be honest—might not have heard of him. We're very hopeful that he comes back on the service.

[Regarding the elevator pitch], it would be about reaching fans. Paul McCartney certainly doesn't need the money. I think that artists of his stature—these artists with rich catalogs from years ago—would be interested in legacy and making sure that his work lives on. The best way to do that today is on a platform like Spotify.

But the exact mindset that's operating here with McCartney, I don't know. Remember: It took the Beatles seven years to get on iTunes. But again, we love Paul McCartney.

What about Adele, whose latest album 21 is not on Spotify in full? Would she have still sold 17 million copies of her album if it was available on Spotify?

We think it's very possible she would've sold more. Again, there's no data to support the proposition that windowing on Spotify resulted in increased sales. The strange thing about that was the entire record was not windowed. Spotify has "Rolling in the Deep," which was the biggest single on that record. The other tracks were withheld.

It's been said that the biggest risk of not being on Spotify is potentially alienating your fans. Is that the biggest risk, or are there others?

That's certainly one of the primary risks. There are a lot of risks though. Really, you risk being on the sidelines. You risk people not caring about your music.

There's one band, and they haven't authorized me to use their name, so I won't. They're a very successful band—they've sold millions of records and continue to do so. This band uses what they call the "Give-A-**** test." They want to know if people really care about them. That doesn't mean they look at SoundScan. It means they might look on Spotify to see how many people are getting jazzed about their music enough to make and share playlists with their songs. They know if people start listening to their stuff in large numbers on Spotify, they are going to profit. That's the bottom line: that people give a...well...you get the idea.

Spotify has great integration with the biggest social network in the world. If you are not plugged into that, you are really missing out on what artists have always known, which is that word-of-mouth and buzz really sells records and concert tickets. On Spotify, someone will see a track a friend shared on Facebook, they'll click on it, and then instantly be listening to that record on Spotify. They'll have the SongKick app, which will tell them when the band is playing in his or her town. I can't imagine anyone not wanting to be a part of that environment.

If all the music that is not available on Spotify (from Adele, the Black Keys, etc.) could suddenly be available tomorrow on the condition that Spotify implemented a 28-day window, would that be something that Spotify is willing to consider? Is that something Spotify is looking into?

No, we're not. If these strategies would work for users and the industry, it would be relevant. But because they don't, no, it's not something we're contemplating.

In your view, then, will windowing become more or less common?

Well, it's not common now. But we think cases, rare as they are today, will become even rarer.

[Image: Flickr user Alexis Mire, and Spotify]

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10 Comments

  • Deke

    Paul did a live broadcast for iTunes from Capitol Studios in LA which highlighted his new album. I believe part of the reason Paul McCartney pulled "Kisses On The Bottom" from Spotify had to do with a commitment to iTunes which guaranteed exclusivity.

  • sarah dev

    The reason why so many Artists do not want their tracks on Spotify, is that Spotify will not let anyone know how much they pay per stream, and when Artists and their Managers attend forums run by Spotify no one in the audience is allowed to ask any questions. Someone is making money from all of this and it ISNT the Artists or the Songwriters and it is very upsetting as a creator not to be able to ask questions or find out any information about why your track has been listened to millions of times and yet you've only received less than a one penny royalty. It feels like we are being robbed blind.
    If its not Spotify, who is making the money from the advertising and subscriptions then who else is it ?  More transparency is needed.

  • Jason Barone

    In my circle, I'm not seeing people going elsewhere to really listen to things they can't get off of Spotify, I'm hearing them say "oh well" and forgetting about the artist. I've been a streaming user for years now and have setup quite a few people on Spotify. They love Spotify so much, they simply don't listen to music if it isn't there.

    Here's my real world Spotify usage scenario: Listen to Spotify Radio, hear a new song that I like, add to playlist(s), listen to the whole album (to take a break from radio/playlists), find few more songs that I like, add those to playlists, listen to other albums from that artist, add more songs to playlists. I'm now a fan of that artist. I would have never purchased that artist's album because of the risk of not liking it and wasting money.

    Artists: if your music isn't on Spotify, believe me, I will do without.

  • Steve

    I don't agree with Ken..Most of the artist mentioned are not part of the bigger labels XL Recordings is a smaller Indie Label distributed by Columbia and The Black Keys are on smaller Indie Label, Cold Play may be the closest to being part of the machine. If you can make more having your music played on Free radio why give it to the Streamers 1st? If your model is based on physical sales you should make a point not to place your music on those services until you are comfortable with amount of sales achieved in the physical world. To say he doesn't get it when users will pay $120 per year for the service means nothing because very little reaches the artist. Majors get a nice cut because they hold the catalog card but smaller boutique types make out better just following the old channels. I own a MOG subscription and listened to MJ Blige's last album 1st before going to buy it @ Best Buy..not iTunes, not Amazon...(I'm a super fan) I also bought The Black Keys' last one without hearing 1st..now that maybe odd but real fans don't steal from artist they like most times...I'm not 18 so maybe that's the difference but torrent fans can also be positive fans ever hear of Pretty Lights ? he used the Bit Torrent to build massive momentum and it was FREE so, not all things Torrent are negative..head over to Music Think Tank for the story...I have nothing against the subscribers I like MOG didn't really like Spotify and haven't tried Rhapsody so part of my dollar is spread between physical sales (I do buy less product) digital, and stream...

  • Wilkinsky

    I understand your points but I'm not certain our arguments are the same.  I don't think the question is if you can have a hit AND be streaming.  An artist like Adele that has millions of dollars pumped into her success is going to succeed no matter the medium.  And I certainly wouldn't consider NPR's (Independent Radio) recent system of offering album streams before/during releases for major artists in relation to Streaming Music services.  But after rereading everything I realized your argument is actually exactly what I find a problem with.  You're right, the FM dial is still king.  But only because it is currently the largest (and quickly dying) delivery platform at the disposal of the music industry which they can easily control and manipulate.  As you point out the numbers just aren't there YET in streaming radio but all thats happening right now is a jockeying for position of which platforms will take over when FM radio finally dies.  Which it undoubtedly will in the near future.  So these people you refer to as digital pioneers I think of more as drones that will find themselves using a vastly different service a year from now.  A service that reflects the exact current state of FM radio which is a broken system in my opinion.  
    Bottom line: Artists DO NOT make money from streaming services like Spotify and Rhapsody.  I'm not sure if you know the numbers but the artists are the ones that should be making the decisions and earning the money.  It is their music.  Ironically, the only artists that would ever even see a check are people like Adele but if you look it up Spotify are the ones that denied her album because they didn't want to pay her price she deserved.So I understand your thoughts and opinion but I still feel without a doubt that Spotify and Rhapsody do not solve a single problem of the current state of people actually in the music industry that don't agree with the power structure.  I still find the wording used in this interview incredibly manipulative and I'm not sure where you disagree with me on that.  

  • Lynn S

    I guess we differ in regards to FM radio.  I think it isn't even close to dying, especially since it's the easiest thing to turn on and listen to in the car even if you own an iPhone.  Radio is #2 to television for most used media format, but don't take my word for it: look at the iTunes top ten tracks -- it is an exact list of what songs are getting the most airplay on FM radio.  I live in an area where people are pretty tech savvy.  Yet in the end, the only music people seem to listen to or gravitate toward are songs you can hear on Top 40 radio stations.  Please note that artists receive $0 from terrestrial radio.  If FM goes away and is replaced by something on line, it still will be "radio" modeled after FM (check Pandora's top radio stations -- it's the same formats as are on FM, just less commercials and talk).

    I am well aware of the microscopic payments artists receive from streaming services.  But sorry, a stream is worth less than a download.  I get to keep that download.  Whereas that streaming track is dependent on subscribing to a service.  If I stop paying, it goes away.  I agree with people upthread, that there should be more transparency.  But Spotify and friends are NOT profitable.  So they're hardly getting rich off this.  Major labels seem to be getting the lion's share of the money but that can't make up for the decline in CD sales and disappointing download sale growth.  Basically, what I'm saying is the future looks grim for us all.  I still buy music, by the way, because I have the sneaking suspicion that most of these on line music services won't be around in ten years.

  • Lynn S

    Sorry, to burst y'all's bubble, but Adele's album was available on all the other streaming services -- the now defunct Napster, Rhapsody, Rdio and MOG.  Her album also appeared on NPR prior to its release for a couple weeks.  It was only Spotify that she snubbed.  So it's pretty clear you can have your album on streaming services and have a smash hit.  The truth is barely anyone uses these services -- Spotify users are digital pioneers, really.  So whether or not it appears there does not affect album sales.  It's easy to get worked up about all this, but all that STILL matters is radio play on the FM dial.  She has been all over it, so there has been no risk of not hearing her music.  So, yes, artists who can get themselves played to death on multiple formats on FM radio can afford to skip the streaming services, I suppose.  But she could have also been on Spotify and it wouldn't have affected her album sales. (And note that '19' is there, which has also been selling remarkably well)  It just stinks for us music subscribers.  I buy a lot of music, but I expect to be able to live with an album on Spotify before taking the plunge.  

  • Wilkinsky

    *Correction: interview with Spotify's chief content officer Ken Parks not Rhapsody's Jon Irwin

  • Wilkinsky

    I agree with Chris 100%.  In fact, I'm actually disappointed in FastCompany for this terrible article.  The ONLY fact in the entire 'interview' was that Adele found success NOT caving to streaming music and found MASSIVE success by NOT doing so.  I believe her album is now the 8th largest selling UK album in history?  This whole interview with Rhapsody CEO Jon Irwin is so carefully worded with what appears like blatant fear-tactics towards any streaming music opposition.  I believe he actually cites all camps witholding music from streaming music services as 'SCHIZOPHRENICS' and that artists are being 'HOSTILE towards fans' by not giving music to Spotify/Rhapsody!??  And who was interviewing him and didn't point out when he tried carefully wording his example of Radiohead's holdout with iTunes, IMPLYING that they eventually caved when in fact even 8 years later Radiohead's latest release was STILL Independent.  Oh yea, and their album before that (In Rainbows) was a digital download for which customers could set their own price, inspiring 1,000s of artists and businesses (like Bandcamp) to maintain independence!  
    This article should be titled as an advertisement.  
    -Noah Wilkinsky

  • Chris Estes

    I call Bullshit.  Music services are no less conniving and evil than the
    studios.  Spotify partnered with facebook and pimps out their
    customers.